Losses Continue

After yesterday's brief lull, sellers continued to push markets lower. In the context of August/September lows, today's action was modest yet unwelcome.

The S&P finished below 2,000, leaving just August and September lows as next support levels. Intermediate Stochastics are not oversold, which may yet see another couple days of downside before a relief rally kicks in.

The Nasdaq gapped for a second time but didn't add too much downside on morning losses (it managed to recover a little by the close).

The Russell 2000 suffered the worst of the losses and has already knocked out the August low,  leaving September lows as the last support level to defend.  Today's close puts the Russell into the 10% zone of oversold prices (see table at the end of this post).

The Dow broke rising support as it too is heading to the August and September lows.

A relief rally should be on the cards soon, but it's becoming more of a struggle to attract buyers. What happens during the next rally is key.

You've now read my opinion, next read Douglas' and Jani's.

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Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com, and Product Development Manager for ActivateClients.com. I do a weekly broadcast on Friday's at 13:30 GMT for Tradercast, covering indices, FX and gold, silver and oil - all are welcome! You can read what others are saying about Zignals on Investimonials.com.


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